Tata Technologies IPO To Open For Subscription, Know Business Model

Tata Technologies, a part of the Tata Group, is known for its expertise in engineering services and digital solutions. It mainly focuses on product development and offers comprehensive solutions to big vehicle makers and their main suppliers worldwide. 

With over 9,300 employees, the company has shown remarkable growth. In the last financial year, it reported its highest revenue increase of 46%, signaling strong business performance.

For its upcoming IPO, Tata Technologies has set the price range at ₹475-500 per share. If you’re interested in investing, this offer will be open from November 22 to November 24. This IPO is significant as it’s the first from the Tata Group in nearly two decades since Tata Consultancy Services (TCS) went public.

Now, let’s look at who owns how much in Tata Technologies. Tata Motors, the major player, holds about 64.79% of the shares. Other key shareholders include Tata Motors Finance, Alpha TC Holdings, and Tata Capital Growth Fund I, combined to make up 77.68% of the company.

The expected size of this IPO is quite substantial, estimated between ₹2,890-3,042 crore. This estimation places the company’s value in a strong position in the market. 

Notably, global investment giants like Morgan Stanley and Blackrock, along with some US hedge funds, are considering investing in this IPO, aiming at a valuation of around $2.5 billion.

However, it’s always wise to be aware of potential risks. Tata Technologies has pointed out some key concerns in its prospects. The company’s revenue heavily depends on its top five clients, meaning losing any of them could significantly impact its earnings.

Also, since a large portion of its revenue comes from foreign currencies, any major fluctuations in exchange rates could affect its financials.

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Tata Technologies IPO is not just about selling new shares. It’s an Offer for Sale (OFS), where existing shareholders, including Tata Motors, Alpha TC Holdings, and Tata Capital Growth Fund, will sell their shares. This means the proceeds from the IPO will go to these shareholders, and not directly to Tata Technologies.